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Emerging two speed jobs market

By TJ (13-09-2007)
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Learning and Development News - Emerging two speed jobs market

The latest quarterly labour market statistics, published by the Office for National Statistics (ONS), indicate that the UK jobs market was operating at two speeds in the summer months with public sector pay and employment prospects clearly starting to lag behind those in the private sector.

CIPD Chief Economist John Philpott said:

"Conditions in the jobs market looked ideal in the summer months - increased vacancies, fewer redundancies, and signs that the long-term sick and 'home grown' unemployed people are finding jobs as well as migrant workers.

"Pay pressures meanwhile remained subdued, ticking up very slightly but still weaker than at the start of the year and still nowhere near the level that might ring alarm bells at the Bank of England.

"How long this good news will continue remains uncertain. The CIPD's own surveys indicate that recruitment has not yet been adversely affected by recent interest rate hikes but that the demand for labour is likely to soften by the end of 2007 as the effect starts to bite. Moreover, the ONS figures show that the finance and business services sector has been the major engine of job growth of late - a sector now in the firing line for job cuts in the wake of the ongoing 'credit crunch'.

"Even without an overall softening in the jobs market, times are already getting much tougher in the public sector. The living standards and job prospects of public servants are being squeezed as they experience an efficiency drive combined with what is in effect a public sector pay policy that, although designed primarily to curb growth in government spending, is also presently the main downward influence on overall pay pressure."

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